LAUREL BEELER, United States Magistrate Judge.
Plaintiffs Rosminah Brown and Eric Lohela bought several different Jason and Avalon Organics brand cosmetic products that are manufactured and marketed by Defendant The Hain Celestial Group ("Hain") and then — on behalf of themselves and other consumers — sued Hain complaining that these and numerous other products were advertised, marketed, sold, and labeled as organic products when they were not organic, in violation of the following state laws: (1) the California Organic Products Act of 2003 ("COPA"), Cal. Health & Safety Code § 110810 et seq.; (2) the Unfair Competition Law ("UCL"), Cal. Bus. & Prof.Code § 17200, (3) the Consumers Legal Remedies Act ("CLRA"), Cal. Civ.Code § 1750 et seq.; and the California Commercial Code provision regarding express warranties, Cal. Com.Code § 2313. Hain moves to strike and to dismiss, arguing that Plaintiffs lack standing regarding products they never purchased, and that Plaintiffs fail to state claims under the applicable statutes. For the reasons discussed below, the court
Hain is a Delaware corporation that manufactures and distributes cosmetic
On or about September 2009, Brown purchased a Jason Ester-C Super-C Cleanser Gentle Facial Wash ("Jason Face Wash") at a market in Roseville, California. Id. ¶ 5. The front label of the Jason Face Wash, which Brown reviewed before purchase, states "Pure, Natural & Organic." Id. Brown believed that the Jason Face Wash was either completely or at least mostly organic and she would not have bought it or would not have paid the same amount for it. Id.
On or about December 2009, Lohela purchased a number of Avalon Organics products. He purchased an Avalon Organics Lavender Hand and Body Lotion ("Avalon Lavender Lotion") from Vitacost.com, an online retailer. Id. ¶ 6. Before purchasing the Avalon Lavender Lotion, Lohela read the name of the product and reviewed a photograph of the product packaging. Id. The front label and the product name display the word "Organics" and the front label includes a pledge by Hain that the product is "pro-organic." Id. Lohela believed that the Avalon Lavender Lotion was either completely or at least mostly organic. Id.
Around the same time, Lohela purchased a number of other Avalon Organics Products and he relied on the same representations identified with regard to the Avalon Lavender Lotion. Id. In total, Lohela purchased seven Avalon Organics Products, including: (1) the Avalon Lavender Lotion, (2) Avalon Organics Glycerin Liquid Hand Soap Lemon, (3) Avalon Organics Vitamin C Soothing Lip Balm, (4) Avalon Organics Vitamin C Refreshing Facial Cleanser, (5) Avalon Organics Botanicals Exfoliating Enzyme Scrub Lavender, (6) Avalon Organics Peppermint Botanicals Shampoo, and (7) Avalon Organics Awapuhi Mango Moisturizing Conditioner. Id.
Plaintiffs allege that Hain advertises, markets, and labels, the Products as organic, when they contain insufficient organic content under the applicable laws to make such claims. Plaintiffs allege that federal law requires "any foods marketed, advertised, labeled, sold and/or represented as organic or made with organic ingredients [to be] comprised of at least 70% organic ingredients." FAC ¶ 12 (citing 7 U.S.C. § 6505; 7 C.F.R. § 205.301). Plaintiffs claim that these regulations do not apply to the Products, which are considered cosmetic products, rather than foods, but that the federal definition has shaped consumer expectations for organic products. Id. Plaintiffs allege that California law, however, does apply to the Products. Id. COPA requires cosmetic products advertised, marketed, sold, labeled, and/or represented as organic in California be comprised of at least 70% organic ingredients. Id. They claim that COPA is a "legislative determination" that it is deceptive
Plaintiffs allege that the Jason Products are labeled with the tagline "Pure, Natural & Organic," and the Avalon Organics Products include a "pro-organic" pledge on their front label and have the word "Organics" in their name. Id. ¶ 14. In contrast to these prominent organic claims, the back label of each Product includes an ingredient list in small print that identifies the organically-produced ingredients with an asterisk. Id. ¶ 15. The ingredients list reveals that the organic ingredients comprise less than 70% of the Products, whether measured by weight or volume. Id.
For example, the Jason Face Wash ingredients list shows that only one of the nineteen ingredients is certified organic and it is listed ninth. Id. ¶¶ 16, 20. Because Hain is legally required to list the ingredients in descending order of prominence, the sole organic ingredient cannot possibly make up 70% of the Product. Id. n. 1. Similarly, only 5 of the 22 ingredients (excluding water and salt) in the Avalon Lavender Lotion are organic and they rank 4th, 10th, 13th, 14th, and 19th in prominence on the ingredient list. Id. ¶¶ 17, 21.
Plaintiffs allege that the ingredients lists on other Jason and Avalon Organics products that they did not purchase also contradict the organic claims made on the front panel. Id. ¶ 22. Some of these products are Baby Avalon Organics Silky Cornstarch Baby Powder, Jason Aloe Vera Soothing Body Scrub, Jason Thin to Thick Extra Volume Conditioner, Jason PowerSmile All-Natural Whitening Toothpaste, Jason Curl Defining Cream, and Avalon Organics Grapefruit & Geranium Refreshing Shampoo. Id.
Plaintiffs do not dispute Hain's labeling claims as to the organic nature of individual ingredients. Id. ¶ 23. Rather, their allegations are based on the assumption that all of the Products' ingredients are accurately identified as organic. Id. Plaintiffs claim that Hain has a pattern and practice of making organic claims on products that do not meet the organic standards required by COPA. Id. ¶ 23.
Plaintiffs also allege that after they filed their original complaint, Hain began a new misleading and deceptive practice. Id. ¶ 27. They allege that Hain now falsely labels some of the Products as containing 70% organic ingredients. Id. Plaintiffs allege that Hain calculates the percentage of organic ingredients in such products by including the weight of water used to reconstitute a dehydrated organic ingredient, a practice allegedly prohibited under COPA. Id. (citing 65 Fed.Reg. 80548-01, 80586 (December 21, 2000) incorporated into COPA by Cal. Health & Safety Code § 110811).
Plaintiffs seek to represent a class and two sub-classes of allegedly similarly-situated individuals. Both Plaintiffs seek to represent a class defined as: "All persons who purchased the Products that were sold under the Jason® or Avalon Organics® brand in California during the applicable statute of limitations."
The parties do not dispute that the number of people in the proposed class exceeds 100, the amount in controversy exceeds $5M, jurisdiction is minimally diverse, and jurisdiction exists under the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d). Compare Notice of Removal, ECF No. 1 (setting forth facts establishing the jurisdictional thresholds under CAFA), with FAC ¶ 8 (same).
Plaintiffs bring six claims for relief. See FAC, ECF No. 68, ¶¶ 38-80.
First, they allege that Hain violated COPA's restrictions on selling, labeling, or representing products "as organic or made with organic ingredients" unless they contain 70% organically produced ingredients. FAC ¶¶ 38-42; Cal. Health and Safety Code § 110838. They allege that they have standing because California Health and Safety Code section 111910(a) permits "any person" to bring an enforcement action seeking injunctive relief under COPA. Id. ¶ 41.
Plaintiffs' second, third, and fourth claims respectively allege violations of the unlawful, fraudulent, and unfair prongs of the UCL, California Business and Professions Code section 17200 et seq. Id. ¶¶ 43-65. The UCL claims under the unlawful prong are based on Hain's allegedly violating (1) COPA, (2) the CLRA (discussed below), (3) California Health & Safety Code section 111730, which prohibits the sale of misbranded cosmetic products, and (4) California Business and Professions Code section 17580.5, which bars untruthful, deceptive, or misleading environmental marketing claims. Id. ¶¶ 43-51. The UCL claims under the unfair and fraudulent prongs are based on the statutory violations and the misrepresentations alleged throughout the complaint. Id. ¶¶ 52-65. Plaintiffs seek injunctive relief and restitution for the alleged UCL violations. Id. ¶¶ 50, 57, 64; id. at 23-24 (Prayer for Relief).
The fifth claim is for violation of § 1770(a)(5), (7), and (9) of the CLRA, Cal Civ.Code § 1750 et seq. Id. ¶¶ 66-74. These CLRA provisions bar:
See id. ¶ 68. The First Amended Complaint seeks injunctive relief, damages, costs, and fees for the CLRA violations. Id. ¶¶ 71-73.
Finally, Plaintiffs claim that Hain breached its express warranties concerning the products in violation of California Commercial Code section 2313.
Brown originally filed suit in Alameda County Superior Court on May 11, 2011, alleging the same causes of action discussed above. See Complaint, ECF No. 1 at 9. Hain removed to this court on June 22, 2011. Notice of Removal, ECF No. 1
Plaintiff filed the FAC on August 21, 2012, adding Eric Lohela as a plaintiff. See FAC, ECF No. 68. On September 24, 2012, 2012 WL 4364588 the court granted Hain's motion for leave to file an interlocutory appeal, but denied its related request to stay the case. See ECF No. 79. The Ninth Circuit denied Hain's section 1292(b) petition. See Docket, No. 12-80186. Hain filed the pending motions to strike and dismiss on October 9, 2012. See Motion to Strike, ECF No. 85; Motion to Dismiss, ECF No. 87.
Hain moves to strike Plaintiffs' class allegations for lack of standing to the extent they are based on products that Plaintiffs did not purchase. Motion to Strike ("MTS"), ECF No. 85. On this record, the court finds that Plaintiffs have standing to sue and DENIES Hain's motion.
Under Federal Rule of Civil Procedure 12(f), a "court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Motions to strike are regarded with disfavor, as they are often used as delaying tactics, and should not be granted "unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the litigation." Colaprico v. Sun Microsystems, Inc., 758 F.Supp. 1335, 1339 (N.D.Cal.1991). In the Ninth Circuit, motions to strike are proper, even if the material is not prejudicial to the moving party, if granting the motion would make trial less complicated or otherwise streamline the ultimate resolution of the action. See Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir.1993), rev'd on other grounds, 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). When considering a motion to strike, a court must view the pleadings in a light most favorable to the non-moving party. California ex rel. State Lands Comm'n v. United States, 512 F.Supp. 36, 39 (N.D.Cal.1981).
Class allegations generally are not tested at the pleadings stage and instead are tested after one party has filed a motion for class certification. See, e.g., Thorpe v. Abbott Labs., Inc., 534 F.Supp.2d 1120, 1125 (N.D.Cal.2008); In re Wal-Mart Stores, Inc. Wage & Hour Litig., 505 F.Supp.2d 609, 615 (N.D.Cal. 2007). Nonetheless, as the Supreme Court has explained, "[s]ometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim." Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). Thus, a court may grant a motion to strike class allegations if it is clear from the complaint that the class claims cannot be maintained. See, e.g., Sanders v. Apple, Inc., 672 F.Supp.2d 978, 990-91 (N.D.Cal.2009).
Standing is jurisdictional, cannot be waived, and is properly addressed under Rule 12(b)(1). See United States v. Hays, 515 U.S. 737, 742, 115 S.Ct. 2431, 132 L.Ed.2d 635 (1995); Chandler v. State
The prudential limitations on federal court jurisdiction require the following: (1) a party must assert his own legal rights and interests, not those of others; (2) courts will not adjudicate "generalized grievances;" and (3) a party's claims must fall within the zone of interests that is protected or regulated by the statute or constitutional guarantee in question. See Valley Forge Christ. College, 454 U.S. at 474-75, 102 S.Ct. 752; Stormans, Inc. v. Selecky, 586 F.3d 1109, 1122 (9th Cir.2009).
In addition to Article III standing, the named plaintiff must establish standing to bring UCL, and CLRA claims. See Cal. Bus. & Prof.Code § 17204; Cal. Civ.Code § 1780(a). These statutes require the plaintiff show that he or she has suffered an "economic injury." See Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 323, 120 Cal.Rptr.3d 741, 246 P.3d 877 (2011). The economic injury requirement under the UCL is "substantially narrower than federal standing ... which may be predicated on a broader range of injuries." Id. at 324, 120 Cal.Rptr.3d 741, 246 P.3d 877.
Hain argues that Plaintiffs lack standing to bring claims based on Hain's labeling of products they did not purchase. MTS, ECF No. 85. Plaintiffs counter that they has established standing and — in any event — the issue of whether they can bring claims based on the products they did not purchase should be addressed at the class certification stage. Plaintiffs' Opposition to Hain's Motion to Strike ("MTS Opp'n"), ECF No. 95 at 10.
There is no controlling authority on whether Plaintiffs have standing for products they did not purchase. See, e.g., Donohue v. Apple, Inc., 871 F.Supp.2d 913, 921-22 (N.D.Cal.2012) (collecting cases).
Some federal courts have held, as a matter of law, that a plaintiff lacks standing to assert such claims. See, e.g., Granfield v. NVIDIA Corp., No. C 11-05403 JW, 2012 WL 2847575, at *6 (N.D.Cal. July 11, 2012) ("when a plaintiff asserts claims based both on products that she purchased and products that she did not purchase, claims relating to products not purchased must be dismissed for lack of standing"); Mlejnecky v. Olympus Imaging America
Other courts have held that the standing inquiry is more appropriately resolved on a motion for class certification. See, e.g., Cardenas v. NBTY, Inc., 870 F.Supp.2d 984, 992-93 (E.D.Cal.2012) (analyzing "solely under Rule 23" whether plaintiff may assert claims on behalf of purchasers of products she did not purchase); Forcellati v. Hyland's, Inc., 876 F.Supp.2d 1155, 1161 (C.D.Cal.2012) (denying defendants' motion to dismiss because the "argument is better taken under the lens of typicality or adequacy of representation, rather than standing").
The majority of the courts that have carefully analyzed the question hold that a plaintiff may have standing to assert claims for unnamed class members based on products he or she did not purchase so long as the products and alleged misrepresentations are substantially similar. See, e.g., Stephenson v. Neutrogena, No. 12-cv-00426 PJH, 2012 U.S. Dist. LEXIS 1005099 (N.D.Cal. July 27, 2012) (dismissing claims based on products not purchased because the purchased products were not "similar enough to the unpurchased products such that an individualized factual inquiry was not needed for each product"); see Astiana v. Dreyer's Grand Ice Cream, Inc., No. C-11-2910 EMC, 2012 WL 2990766, at *11 (N.D.Cal. July 20, 2012) (noting that in most reasoned opinions, "the critical inquiry seems to be whether there is sufficient similarity between the products purchased and not purchased"); see also Anderson v. Jamba Juice, 888 F.Supp.2d 1000, 1005-06 (N.D.Cal.2012) (relying on Dreyer's for the same proposition).
For example, in Dreyer's, the plaintiffs found sufficient similarity where the plaintiffs challenged:
2012 WL 2990766, at *13. Similarly, in Anderson v. Jamba Juice Co., the court held that the plaintiff, who purchased several flavors of at-home smoothie kits labeled "All Natural," had standing to bring claims on behalf of purchasers of other flavors because the products were sufficiently similar and because the "same alleged misrepresentation was on all of the smoothie kit[s] regardless of flavor ...." 888 F.Supp.2d 1000, 1006 (N.D.Cal.2012).
Where product composition is less important, the cases turn on whether the alleged misrepresentations are sufficiently similar across product lines. For example, in Koh v. S.C. Johnson & Son, Inc, No. C-09-00927 RMW, 2010 WL 94265, at *1, *2-3, 2010 U.S. Dist. LEXIS 654, at *2, *6-7 (Jan. 5, 2010), the plaintiff purchased Windex brand glass cleaner that bore a "Greenlist" label suggesting the product was environmentally-friendly. He also sought to challenge the defendant's use of the identical label on Shout brand stain remover that he had not purchased. Id. at *1, 2010 U.S. Dist. LEXIS 654, at *2. Because the labels were identical, the court denied defendant's motion to dismiss for lack of standing and deferred ruling on
Where the alleged misrepresentations or accused products are dissimilar, courts tend to dismiss claims to the extent they are based on products not purchased. For example, in Larsen v. Trader Joe's Co., No. 11-cv-5188-SI (Docket No. 41), 2012 WL 5458396 (N.D.Cal. filed June 14, 2012), the court found that the plaintiffs lacked standing to bring claims based on products they did not purchase. There, the plaintiffs challenged "a wide range of Trader Joe's products (cookies, apple juice, cinnamon rolls, biscuits, ricotta cheese, and crescent rolls) which bear little similarity." Dreyer's, 2012 WL 2990766, at *13 (finding Larsen distinguishable). And in Stephenson v. Neutrogena, the court dismissed claims based on products not purchased where plaintiff brought suit over six Neutrogena Naturals products but had only purchased the purifying facial cleanser. 2012 U.S. Dist. LEXIS 1005099, at 1.
This court finds the approach in Dreyer's, Jamba Juice, and Stephenson to be persuasive and considers whether there are substantial similarities in the accused products and whether there are similar misrepresentations across product lines such that Plaintiffs' injury is sufficiently similar to that suffered by class members who purchased other accused products.
Here, Plaintiffs argue that the court should address Hain's standing argument in the context of a motion for class certification under Rule 23, rather than a motion to strike, because they allege uniform misrepresentations across product lines. MTS Opp'n, ECF No. 95 at 12-16. Based on the record presented, the court agrees.
This court recently issued an order on this subject in another labeling case, finding that plaintiff lacked standing to bring claims based on products he did not purchase. See Miller v. Ghirardelli Chocolate Co., 912 F.Supp.2d 861, No. C 12-04936 LB, 2012 WL 6096593 (N.D.Cal. Dec., 2012). There, Miller sought to bring claims based on Ghirardelli's alleged misrepresentations on the packaging of the white baking chips he purchased and four products he did not purchase. The accused products varied widely in composition (baking chips, three drink powders, and baking wafers), and some were sold in commercial, rather than consumer markets. Miller's false labeling claims were based on various alleged misrepresentations, including the use of the word "flavored" on two products, the words "classic" and "white" on other products, and "romance language" that differed from product to product. All of the accused products, however, were marked with the same "Ghirardelli Chocolate" logo. Miller argued that the logo — when viewed in the context of the entire label — misled consumers into thinking that the accused products contained white chocolate when they did not. The court found that Miller lacked standing because the logo claim — the only common misrepresentation across product lines — was relatively unimportant considered in the context of the varying alleged misrepresentations. Thus, the court held, Miller's injury was not sufficiently similar to the injury suffered by purchasers of other products.
This case is different from Ghirardelli Chocolate. Like that case, Plaintiffs complain
The court's conclusion is bolstered by Plaintiffs' disclaimer of any intent to challenge whether specific ingredients actually are organic. See FAC, ECF No. 68, ¶ 23. Therefore, unlike Stephenson v. Neutrogena and Larsen v. Trader Joe's, the dissimilarity of the accused products is relatively unimportant.
Hain makes a few additional arguments that do not change the outcome.
Hain argues that the court's standing inquiry should consider whether the accused products' "function" and "substitutability," are sufficiently similar. MTS, ECF No. 85 at 3, 9. On this record and at the motion to strike stage, Plaintiffs' uniform misrepresentation allegations are sufficient to render irrelevant any differences in the function and substitutability of Hain's cosmetic products.
Hain also contends that Plaintiffs lack standing to bring their UCL and CLRA claims because they have not alleged an economic injury as required by the relevant statutes. MTS Reply, ECF No. 100 at 5. Plaintiffs alleged economic injury. See FAC, ECF No. 68, ¶¶ 5-6. They also "plead[ed] and prove[d] actual reliance" on the challenged labels. In re Tobacco II Cases, 46 Cal.4th 298, 326-28, 93 Cal.Rptr.3d 559, 207 P.3d 20 (2009).
The court denies Hain's motion to strike.
Hain moves to dismiss the FAC based on its argument that it complies with COPA, because no reasonable consumer would be misled by its statements, and because it never made any affirmations of fact or promises warrantying that its products were organic. See Motion to Dismiss, ECF No. 87.
Each party asks the court to take judicial notice of documents. See Def.'s Request for Judicial Notice ("Hain RJN"), ECF No. 86; Pls.' Request for Judicial Notice ("Pls.' RJN"), ECF No. 94.
On a Rule 12(b)(6) motion to dismiss, the court generally may not consider materials beyond the pleadings. The court may also consider unattached evidence on which the complaint necessarily relies if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the document. U.S. v. Corinthian Colleges, 655 F.3d 984, 998-99 (9th Cir.2011) (citing Marder v. Lopez, 450 F.3d 445, 448 (9th Cir.2006) and Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir.2001)); see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) ("[C]ourts must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice").
In addition, under Federal Rule of Evidence 201, "[t]he court may judicially
Hain asks the court to take notice of eight label proofs that it claims depict the labels for the eight products that Plaintiffs purchased. Hain RJN, ECF No. 86 at 3. Hain supports its request with the declaration of Alice L. Brooks. Brooks Decl., ECF No. 86-1. Ms. Brooks states that she "work[s] for The Hain Celestial Group, Inc., whose brands include JASON® and Avalon Organics®." Id. at 2. Ms. Brooks claims to have personal knowledge of the facts set forth in her declaration and "access to company records setting forth these facts ...." Id. For each Product, she states that a specified exhibit to her declaration "is a true and correct copy of the label ... in effect in 2009." Id.
Plaintiffs object to Hain's request for judicial notice, arguing that the exhibits distort the way consumers view the Product labels and that Hain has not established their authenticity. Objections to Hain RJN, ECF No. 96 at 2. As to the distortion argument, Plaintiffs argue that these are proofs of labels that "are a distortion of the way in which consumers actually see the Products' labeling" because they "misleadingly portray the principal display panel, the information panel and the ingredients list side-by-side." Id.
The court declines to take judicial notice for several reasons. First, Plaintiffs made an authenticity objection and that generally is dispositive. See Corinthian Colleges, 655 F.3d at 998-99. Second, assuming authenticity objections could be surmounted (and usually they can), these are proofs, not photographs of the labels or the products themselves. (Despite Hain's argument to the contrary, parties sometimes submit products when they are small and few in number. See Order at 3-4 n. 2 Miller v. Ghirardelli Chocolate Company, 912 F.Supp.2d 861, No. C 12-04936 LB, 2012 WL 6096593 (N.D.Cal. Dec. 7, 2012)). Plaintiffs make factual arguments about what the proofs do and do not show, and that is enough at the motion to dismiss stage so that the court should not take notice of them.
Hain cites cases where courts consider labels, but those do not change the outcome because no party objected to those requests for judicial notice. See Dvora v. General Mills, Inc., No. CV 11-1074-GW(PLAx), 2011 WL 1897349, at *2 (C.D.Cal. May 16, 2011); Von Koenig v. Snapple Beverage Corp., 713 F.Supp.2d 1066, 1072-73 (E.D.Cal.2010); McKinniss v. Sunny Delight Beverages Co., No. CV 07-02034-RGK, 2007 WL 4766525, at *4 n. 1 (C.D.Cal. Sept. 4, 2007) (considered defendant's color label exemplars because
Finally, the court observes that Hain has not established the relevance of its submissions. Ms. Brooks states that each label "is a true and correct copy of the label ... in effect in 2009." See Brooks Decl., ECF No. 86-1 at 2. That does not establish that there was only one label for the Products in 2009 such that this was the label on the products on store shelves or the website where Plaintiffs purchased the Products. The declaration establishes only that the labels were used at some point in 2009. On a motion to dismiss, the court declines to infer that this was the only label in effect in 2009 particularly when the declaration does not illuminate the basis for Brooks's knowledge of Hain's labeling practices.
No one objects to the other documents, and they are properly the subject of judicial notice.
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face. See id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard is not akin to a `probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the `grounds' of his `entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal citations and parentheticals omitted).
In considering a motion to dismiss, a court must accept all of the plaintiff's allegations as true and construe them in the light most favorable to the plaintiff. See id. at 550, 127 S.Ct. 1955; Erickson v. Pardus, 551 U.S. 89, 93-94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007); Vasquez v. Los Angeles County, 487 F.3d 1246, 1249 (9th Cir.2007). In addition, courts may consider documents attached to the complaint. Parks School of Business, Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir.1995) (citation omitted).
If the court dismisses the complaint, it should grant leave to amend even if no request to amend is made "unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000) (quoting Cook, Perkiss and Liehe, Inc. v. Northern California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir.1990)). But when a party repeatedly fails to cure deficiencies, the
Hain first moves to dismiss Plaintiffs' COPA claim, arguing that its product labels do not violate COPA because COPA does not bar products with less than 70% organic content from using the words "organic" or variants thereof on its front label panel. Hain's point is that its "labels neither state the product itself is organic or identify as organic an ingredient that is not a certified organic ingredient" and therefore do not violate COPA. See MTD at 15-16; MTD Reply, ECF No. 99 at 11. The court finds that Plaintiffs plausibly allege COPA claims in that they state that the Products are sold, labeled, or represented as organic and that the labels impermissibly identify the Products' content as organic.
COPA provides that "cosmetic products sold, labeled, or represented as organic or made with organic ingredients shall contain, at least 70 percent organically produced ingredients." Cal. Health & Safety Code § 110838(a).
Id. at § 110839. The phrase "sold as organic" means:
Id. at § 110815(k).
Plaintiffs allege that the Products contain less than 70% organically produced ingredients but are sold as organic because Hain uses grammatical variations of the term organic in the product labels. In opposition to Hain's motion to dismiss, Plaintiffs argue that these allegations are sufficient under the plain language of COPA. MTD Opp'n, ECF No. 93 at 16-17. COPA is unambiguous on this point and the court agrees that Plaintiffs' allegations are sufficient. Plaintiffs allege that the word "organics" in the Avalon Organics brand name and the "pure, natural, and
Hain's arguments do not change the outcome.
Hain argues that COPA expressly authorizes the sale of cosmetic products containing less than 70% organic ingredients and Plaintiffs' contention otherwise is an attempt to exploit a drafting error in COPA. MTD Reply, ECF No. 99 at 7.
Hain points out that the "sold as organic" definition in COPA section 110815(k) is so broad that it swallows the rest of the statute. MTD Reply, ECF No. 99 at 7-8. Instead, Hain suggests that the section 110815(k) "sold as organic" definition "simply describes the kind of transactions that subject a product to the statute's terms." Id. at 8-9. Hain then argues that COPA's definitions of "sold as organic" in the context of "multi-ingredient cosmetic products" would conflict with the NOP regulation defining what "agricultural products" may be sold as organic and would, therefore, be supplanted by them. Id. But this argument assumes that the NOP regulations apply to cosmetic products and that the statute could not differently define "sold as organic" for cosmetics. Hain has not demonstrated those regulations apply or explained why the two product classes should be treated identically.
The court recognizes the tension that between the section 110815(k) "sold as organic" definition and the rest of the statute, but it does not change the outcome here.
Hain also argues COPA section 110839 shields it from liability under 110838. Section 110839 permits products with less than 70% organic content to be "sold as organic" if the organic content is identified only on the ingredient statement or information panel and in accordance with additional conditions. See Cal. Health & Safety § 110839(a)-(b). It is undisputed that Hain's Products use the word "organic" on the front labels of the Products. Thus, section 110839 does not insulate Hain from liability under 110838. There may be a conflict between section 110838's complete prohibition of organic claims on cosmetic products with less than 70% organic content and section 110839's exceptions to
Hain argues that it complies with 110839 because the Products bear ingredient lists that identify the organically-produced ingredients with an asterisk. Reply, ECF No. 87 at 16. But under section 110839, Hain "may only identify the organic content" as provided. Cal. Health & Safety § 110839 (emphasis added). Plaintiffs allege that Hain identifies the organic content of its cosmetic products as allowed by section 110839 and also through the Avalon Organics brand name, and the Jason tagline and "pro-organic" pledge.
Next Hain contends that Plaintiffs' reading of section 110839 must be incorrect because it would "prohibit[] any use of the word `organic' on a product label except on the information panel" and renders the word "content" in the statute meaningless. MTD Reply, ECF No. 99 at 9. Plaintiffs claim that "COPA prohibits `any use' of the term organic or organic [sic] in the labeling of products that contain less than 70 percent organic content, subject only to the exception for listing organic ingredients on the ingredient statement." MTD Opp'n, ECF No. 93 at 17. Hain suggests that Plaintiffs' reading of section 110839 would prohibit labels with insufficient organic content from making claims like "we support organic farmers," "supporting organic lifestyles," or "choose organic." Id. As a matter of formal logic, the court agrees, but this does not alter the court's conclusion that Plaintiffs' allegations about the labels on these products are sufficient to state a claim.
Section 110838(a) prohibits Hain from selling, labeling, or representing the Products as organic or made with organic ingredients (because they do not contain at least 70 percent organically-produced ingredients), and section 110839 prohibits Hain from identifying the organic content of the Products other than as permitted in the ingredient list. Hain's hypothetical examples might not identify the organic content of the products and might not constitute selling, labeling, or representing the products as organic (though they might). Those examples, however, are very different from using the phrase "pure, natural, and organic" as a tagline or the word "organics" in a brand name. Hain's labels (at least arguably) identify the contents as organic.
Hain makes additional arguments predicated on its contention that the NOP directly regulates COPA's cosmetic regulations. See, e.g., MTD, ECF No. 87 at 17, 18 n. 13; Reply, ECF No. 99 at 11-12. As discussed in the order denying Hain's previous motion to dismiss, ECF No. 58 at 23-24, Hain has not established that the NOP regulates cosmetics.
Hain next moves to dismiss Plaintiffs' UCL and CLRA claims, arguing that the alleged statements are not likely to deceive a reasonable consumer. MTD, ECF No. 87 at 16. Plaintiffs argue that their allegations of deceptive misrepresentations are sufficiently plausible to survive a motion to dismiss and that the ultimate determination is a fact question not appropriate for resolution at this stage of the case. MTD Opp'n, ECF No. 93 at 18-25. The court agrees that Plaintiffs' claims are sufficiently pleaded.
Whether a particular misrepresentation violates the UCL or CLRA is determined by the reasonable consumer test. See Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir.2008) (citing Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir.1995)). Under that standard, the plaintiff must "show that members of the public are likely to be deceived." Id. (quotation marks and citations omitted). Generally, the question whether a business is deceptive is an issue of fact inappropriate for decision on a motion to dismiss. Id. at 938-39. Dismissal of such claims is appropriate where the plaintiff fails to show the likelihood that a reasonable consumer would be deceived. Freeman, 68 F.3d at 289-90.
Plaintiffs allege that the Avalon Organics brand name and Jason "pure, natural, and organic" tagline could deceive a reasonable consumer. Under the reasonable consumer standard, as Hain argues, "the key inquiry is whether a statement is misleading in the context of the entire label." MTD Reply, ECF No. 99 at 16. The entire label is not before the court, precluding dismissal on this basis. Even if the court considered the label proofs, the court could not say, as a matter or law, that no reasonable consumer would be deceived by their organic claims.
Hain's remaining arguments do not change the outcome.
First, Hain argues that Plaintiffs' claims must be dismissed because its labels are not "inherently misleading." Hain relies on an NOP regulation stating that "the term, `organic,' in a brand name context does inherently imply an organic production or handling claim and, thus, does not inherently constitute a false or misleading statement." MTD, ECF No. 87 at 17 (quoting Final Rule, 65 Fed.Reg. 80548, at 80,576). Hain also cites Bronco Wine Company v. Jolly, 129 Cal.App.4th 988, 1006-07, 29 Cal.Rptr.3d 462 (2005), which states that brand names "have no intrinsic meaning" and "do not necessarily reflect the continued quality of the product offered and need not convey information about the nature, quality, or origin of the product." Assuming that this NOP regulation applied, the court still finds at the pleadings stage, the alleged misrepresentations in the context of this branding could reasonably be interpreted to mean that the product is being sold as organic or that it otherwise meets a compositional standard for the term "organic." And as Plaintiffs point out, the cited passage in Bronco Wine states that brand names can constitute deceptive commercial speech. MTD Opp'n, ECF No. 99 at 21.
Third, Hain attempts to recast Williams v. Gerber, in which the Ninth Circuit characterized as "rare" the situation in which courts may decide whether a practice is deceptive, fraudulent, or unfair on a motion to dismiss. 552 F.3d 934 (9th Cir. 2008). Hain suggests that other courts have interpreted Williams as holding that "[a]mbiguous representations, as opposed to untrue ones, can be `clarified by the detailed information contained in the ingredient list' explaining a product's exact content." MTD Reply, ECF No. 99 at 16 (quoting Hairston v. S. Beach Beverage Co., No. CV 12-1429-JFW (DTBx), 2012 WL 1893818, at *5 (C.D.Cal. May 18, 2012)). On this record, the court finds the question of whether Hain's product name and tagline are ambiguous or untrue to be a close one inappropriate for disposition on a 12(b)(6) motion.
In sum, the court denies Hain's motion to dismiss the UCL and CLRA claims.
Hain moves to dismiss Plaintiffs' claim for breach of express warranty. Hain contends that that Plaintiffs do not allege that that it made any affirmation of fact or promise that might establish an express warranty. MTD, ECF No. 87 at 20-21. Plaintiffs' express warranty claim is based on California Civil Code section 2313, which states, in relevant part:
To prevail on a breach of express warranty claim, Plaintiffs must prove: (1) "the seller's
In their opposition brief, Plaintiffs argue that the Jason Products warrant that they are "Pure, Natural & Organic" and the Avalon Organics products warrant that they are "Organics." MTD Opp'n, ECF No. 93 at 25. In contrast, Hain argues that its use of the word organic in the Products' brand name or tag line did not constitute an "affirmation of fact or promise that `the Products [themselves] are organic,' `predominantly organic,' or `70% organic,'" MTD, ECF No. 87 at 21. As discussed above, the court finds that Plaintiffs' have plausibly alleged that Hain has made such claims. Accordingly, Hain's motion to dismiss Plaintiffs' express warranty claims is DENIED.
For the reasons discussed above, the court DENIES Hain's motion to strike and DENIES its motion to dismiss.
This disposes of ECF Nos. 85 & 87.
